Despite the substantial investments made in logistics and sortation networks to avoid damage to packages during shipment, it is unfortunately the case that a certain small percentage of packages are damaged during shipment by virtually all shipping carriers. Damage may be caused by the fragility of the merchandise inside the package, the physical characteristics of the packages, the handling of the package, the distance traveled, and the conditions under which the packages are shipped. Some packages may be damaged only slightly with, for instance, aesthetic damage to the outer packaging. Other packages may be damaged to the point that the merchandise inside the package is damaged, destroyed, or lost during shipment.
When a package is damaged, the shipping carrier makes a determination as to whether the damage claim for the package should be approved. The shipping carrier notifies the sender of the damage and informs the sender as to the damage claim determination. The importance of the accuracy of such determination is critical for a variety of reasons. First, the accuracy of such determination will likely reduce damage claim costs for the shipping carrier. Payment of such insurance claims represents an expense for shipping carriers, and thus, the accuracy of the determination that a package has been damaged can have a direct impact on the financial bottom line for such businesses. Furthermore, paid insurance claims result in higher costs not only for package senders, such as merchants, but for end-level users, i.e. customers.
Second, customer churn from inaccurate and/or inconsistent determinations for damage claims may be increased. Customers who order merchandise from a business or individual expect for the package containing the merchandise to arrive intact, and in a timely fashion. The shipping customer expects that any damage claim notification and determination is prompt, fair and consistent. The merchandise or pieces of merchandise within delivered packages may be imperative for the customer or the customer's business. Thus, customers need damage claims to be handled properly, and accurately, so replacement merchandise may be ordered if necessary with funds from the damage claims. Consistency is important for shippers that experience claims to their shipments and receive varying results from the claims determination process. Customers may ask why a damage claim for one package was approved and a damage claim for a package packed exactly in the same manner was denied.
Completely eliminating the possibility of packages becoming damaged during shipment process would be impossible. However, it would be desirable to improve processing of damage claims in order to prevent damage claims from being paid when the merchandise inside the package is actually intact, or when the damage is not the fault of the shipping carrier due to improper packaging of the merchandise by the sender. Thus, it would be desirable to provide a system and method for determining compensation for damage claims on a basis that more accurately accounts for the actual damage incurred, and properly allocates the loss between the parties according to their fault in causing the damage. Also importantly, providing the customer with useful root cause feedback is critical to improving future shipping experiences.